Lord Marland
Main Page: Lord Marland (Conservative - Life peer)Enterprise and Regulatory Reform Bill
Lord Marland Excerpts
Lord Young of Norwood Green
My Lords, I support the amendment. I am still trying to get my head around the vision of the noble Lord, Lord Marland, as a recruiting sergeant, and I look forward to seeing him at the next factory gates recruitment session. More seriously, this is an appropriate amendment given the background against which the further involvement of ACAS is taking place. Let us be clear on the principle of what the Government are doing. We are at one with the principle of involving ACAS in mediation and conciliation. There is no argument against that. But, as a number of my noble friends have said, if the Government want the ends, they have to will the means. That is the real concern behind the amendment.
As my noble friend Lord Monks said, it is being introduced against the backdrop of a number of other changes being made to workers’ rights, such as the extension of unfair dismissal to two years and the introduction of fees. A lot is going on in this area. We are not opposed to the principle, but we are concerned about whether there will be enough resources. Although the noble Baroness, Lady Brinton, talked about a review, we are actually talking about the anticipation of an impact assessment. We agree about the need for a review, but that will take place in another amendment. I would be interested if the Minister could tell us what the effect of introducing conciliation right across the board will be. Has the situation already been assessed?
It could be said that to a certain extent this is a probing amendment, but we regard it as a serious one. Our concern is that if you want the involvement of ACAS and if it is going to function in a way that will enable it to carry out a conciliation and mediation role, we all need to be assured that the service has the necessary means to do it.
I look forward to hearing from the Minister as to whether the Government have assessed the impact of this issue, including on other areas such as fees. What do they see as the necessary resource requirements of ACAS in its new situation?
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Marland)
My Lords, I thank the noble Baroness, Lady Donaghy, for the amendment. It is, quite rightly, an interesting area to probe. I also compliment her on her work as chair of ACAS and the work of its board.
In summary, this is a nice problem to have. We all agree that ACAS is a terrific institution. It probably sounds rare for this Government to say that they thought it was a very good institution, but we believe strongly in it as an important place to resolve difficulties. That is why we intend to put much more in the way of resources into it, and it will become a fundamental block for early resolution of a lot of disputes. We know it acts fairly and properly, it has a good track record, and we are keen to support it.
I know that many noble Lords have read our recently published impact assessment on resolving workplace disputes, which helps to answer a number of issues that have been raised. We will produce in the new year a further impact assessment on how this process will work and whether the funding should be upfront, which the noble Baroness asked for. We are working to determine the extent of the funding and how best it is to be provided. I hope that by the time we get to the Report stage in the Chamber, quite a lot of the questions will have been answered.
It is important that we get it right and that we listen to the words of the chairman, who said, in front of the House of Commons Committee, that he was confident that ACAS would be adequately funded for its new task. Do not, therefore, take it from us; take it from him that he is confident he will get the right funding. We are working closely with him and the organisation to make sure that we do that. I totally accept and agree, as do the Government, that it is critical that ACAS is properly funded, and we will be able, in the normal course of its annual report, to see how that funding is operating. Noble Lords will be able to judge for themselves annually how that is improving and, through the normal avenues, determine that the progress we hope for on all sides of the House is being made as satisfactorily as possible.
I thank the noble Baroness for this probing amendment. It gives me an opportunity to lay out clearly how we are going to proceed. On that basis, I hope that she will withdraw the amendment and look to see how this develops in the next month or so.
Baroness Donaghy
I thank noble Lords who took part in the debate, and particularly the Minister for his response. As he said, it is a good problem to have, and I am glad that he has again publicly acknowledged the work of ACAS and the need to produce substantial funding. I asked four or five questions, and I understand that he is not in a position to answer them today. I note what he said about producing the impact assessment on the process, which is still being worked out. It may well be that by Report stage we will all be gloriously happy. Would it be helpful if I dropped him a note to remind him of those questions, or is he satisfied that they will appear in Hansard?
Lord Marland
Naturally, I have noted the questions and I will save the noble Baroness time because I have excellent officials working on this. We take her questions seriously, and I hope that as the assessment continues we will go skipping as lambs in the new year when we have seen the outcome.
Baroness Donaghy
I thank the Minister for that answer. We will be monitoring the situation closely and are keen to have answers about resourcing. In that context, I beg leave to withdraw the amendment.
Lord Young of Norwood Green
My Lords, this is again a legitimate probing amendment. I, too, would be interested in getting some reassurance from the Minister about the process of conciliation. We hope that the conciliation process will work but there are going to be cases—I guess a significant number—where it does not. I suppose that the aim is to ensure that we do not insert any more delay than is necessary. The point about a certificate has already been raised. It would be useful if the Minister could confirm that the clock does not start running again until after the certificate has been issued.
Lord Marland
I am very grateful for this probing amendment—well I am sort of grateful, as much as one can be for an amendment. I recognise the noble Baroness’s direction of travel—time is crucial for someone who has lost their job. The whole point is to be able to get a quick resolution so they can go back and find another job or sort out the problems between them. We all agreed in an earlier amendment that ACAS is in an unrivalled position to do that and that is why we are very keen to support this direction of travel.
Having been quite a significant employer myself—and employee, as I thought in my own mind—and on one rare occasion been associated indirectly with a tribunal and seen how it was operated, I have deep concerns for both the employee and the employee about the terrible time it takes to go through a tribunal. It can be months before a decision is made and hours can be spent often on quite simple things. Both employee and employer are hung out to dry for months on end, not knowing what the cost is going to be, what the result is going to be and whether they will be able to go back to employment. It therefore seems to me that this is a simple process putting firmly in the domain of ACAS the opportunity to resolve an issue before going to the tribunal. It does not stop a party going to the tribunal, of course—it is well within their rights to do so. There is every opportunity to do so.
I emphasise that the Government are open to listening to other alternatives, if a better alternative is found, but I think that most of us here think that ACAS is the right place to go and that if we can have a speedy resolution to our problem, we should do so. I know that other noble Lords have had experience in this area. We would be open to suggestions from the noble Baroness about alternatives.
I am not sure that I can deal with the specific point that the noble Lord, Lord Monks, mentioned because he knows far more about it than I do. I would like to consider the question and drop him a note on it. It is something I want to get my head around. He has probably set me a huge elephant trap that I will stumble into unbeknownst.
I hope that I have given the noble Baroness a clear line of travel and—
Lord Young of Norwood Green
I want to be clear what the Minister is going to clarify. I asked about when the clock starts. Is it after the certificate has been issued? I would be grateful if that could be clarified.
Lord Marland
I can clarify that. The certificate is necessary to demonstrate compliance with the obligation. It would have to be issued within that framework.
Baroness Brinton
It would be very helpful for other Members of the Grand Committee to be able to see the Minister’s letter to the noble Lord, Lord Monks, and any other replies that are circulated.
Lord Brooke of Sutton Mandeville
My Lords, before the noble Baroness rises to make her final decision, I intervene to make the point that there is sympathy around the Grand Committee for the case that she has been putting forward. I have only once been involved in legal proceedings. It was an industrial tribunal. I was advised that once the person who was taking us to the industrial tribunal had instituted proceedings, I should not be involved in giving her advice, against the possibility of misunderstanding, but I was very strongly of the view that she was making a mistake. Our barrister was the noble and learned Lord, Lord Irvine of Lairg, before he ascended to that role, and his pupil, who accompanied him, was the future Prime Minister. They were effective in arguing our case, and the tribunal found that there was no proper cause for compensation to be offered. The irony of the whole thing was that the fees of the noble and learned Lord, Lord Irvine of Lairg, and whatever he provided to the former Prime Minister exactly equalled the money that we had been prepared to give her before she instituted the proceedings against us.
Lord Marland
My officials have suggested that I clarify as I was not perhaps as clear as the noble Lord wanted. They have passed me a note saying that the clock stops when the claim is received by ACAS and starts again when the certificate is received by the claimant. Is that as clear as mud?
Baroness Turner of Camden
I thank the Minister for the very sympathetic response he made to the amendment. I welcome his statement that the Government would also welcome a speedy resolution of these issues. I shall consider very carefully what he said. It seems to me that we could perhaps work towards a form of wording so that in the kind of cases that I have been particularly concerned with, a speedy resolution would be possible. That is terribly important in this kind of case, in particular. I will withdraw the amendment now, but will probably come back on Report with a different form of wording. I beg leave to withdraw the amendment.
Lord Young of Norwood Green
My Lords, this is an eminently sensible proposal and I am sure that the Government are going to review the workings of ACAS in the light of the new procedures. My noble friend has set out in graphic detail the likely impact of what is taking place. We need to ensure that we get this right, because if we do not, we are likely to see the law of unintended consequences take effect. I shall be interested to hear from the Minister what review process the Government have planned, and what the timescale is.
Lord Marland
I can give noble Lords a very simple answer because both the Government and the people observing us will want to make sure that there is a review of how ACAS is performing. As the noble Baroness will know better than I, having been the chair of ACAS, it has to report annually to the Secretary of State, and we will insist on that. For those who are interested, it is set out in Section 253 of the Trade Union and Labour Relations (Consolidation) Act 1992. I can tell the noble Baroness that early conciliation will form part of that report, so in our view there is no need to have a separate report from what is embraced in the annual report. I hope that satisfies the noble Baroness, but I want to say that it is fundamental that this is reviewed and that the whole thing is taken seriously. The report is published and will be available in the Library of the House, so everyone has an opportunity to read it and make sure that everything is progressing in the way we all hope it will.
Baroness Donaghy
I thank my noble friend Lord Young for his contribution and the Minister for his answer. I am afraid that I am not entirely satisfied, mainly because the ACAS council report has to be essentially apolitical and must not comment on government policy, so the likelihood is that the judgment will be made on the efficiency of its organisation and the effectiveness as it sees it of the new procedure. It would not take account of the things I mentioned on an earlier amendment, including the wider impact on employment relations; that is, elements that might be said to be more political, with a small “p”. It also does not take account of an independent assessment of the adequacy of funding or of the impact at employment tribunals because it would not be proper for ACAS to comment on how the tribunals run their business. There are concerns, perhaps more particularly around the certificate. ACAS might have its own judgment about how effective it is as a process, while an independent assessment might make a different judgment. I am not saying that that would happen, but just relying on the annual report of the ACAS council may not provide the information we are looking for.
In agreeing to withdraw the amendment, I hope that the Minister will take account of the points I have made.
Baroness Turner of Camden
My Lords, I originally intended to delete from the Bill any reference to this form of officer. However, I must point out that the Law Society, which has also briefed me along with the TUC and many other bodies, has already expressed some concern about this provision. It says:
“The Bill provides a new power for Legal Officers to make determinations in some (to be specified) Employment Tribunal Claims. The Society recognises the potential for Legal Officers to perform some duties, but stresses that they must be suitably qualified”.
It is clearly concerned that we will have people who are not suitably qualified making decisions on some of these highly complex potential arbitration cases. Therefore, I echo what my noble friend Lady Donaghy has said: the Government have to be rather careful about this. Given that specialist advice warning, I hope that they will look at it very carefully.
Lord Marland
Members on the Benches opposite make some very timely comments on this amendment because at the moment the Government are reviewing the response to the consultation. One of the elements of that review is rapid resolution, which involves legal officers, so we will obviously consider the points that the noble Baronesses and the noble Lord, Lord Young, have made. As I say, they are timely.
I say in response to the noble Lord, Lord Young, that decisions of a legal officer would be reviewed by a judge, so there is someone looking over their shoulder, and any decision by a legal officer could be reviewed or, indeed, reversed within the existing provisions in the employment tribunal rules. I think we have a level of comfort there but, as I said, this is a timely amendment. It is not something on which we have resolved our position. Noble Lords have identified a number of areas of concern. As we are in the middle of a consultation process, we will obviously take those into account. We will, I hope, have come to our conclusion by Report, when we can talk further and explain what is going on. On the basis of those comments, I hope that the noble Lord will withdraw his amendment.
Lord Young of Norwood Green
I thank the Minister for the assurance that he will give us a more detailed answer prior to Report, pending the results of the consultation. We have stressed the importance of ensuring that the individuals have the right training. We have also stressed the importance of establishing,
“the appropriate remit of proceedings that an appointed legal officer could determine”.
Given the assurances that I have received from the Minister, I will withdraw the amendment. However, if we do not get a satisfactory response, we may return to it on Report. I beg leave to withdraw the amendment.
Baroness Brinton
I have slightly different concerns about Clause 11, but they stem from the same starting point. They are about why the Bill proposes to give the judge much more power to decide on whether a panel should sit with him or her to hear an appeal.
Given that the practice is already there, evidence shows that lay people are brought in to assist a judge, usually on a controversial decision that requires expertise from both the employer and the workforce background. As has been mentioned by other noble Lords, lay members of these appeal panels frequently are respected by both parties. That balance has been an absolute strength of the appeal panel. I am struggling to see why it should become automatic that the judge would sit on his or her own.
I rather pointedly said “his or her own” because I also want to raise the issue of the diversity of an appeal panel when a judge is sitting on his own—it is usually “his” own—and diversity has, ironically, been provided by the lay members. Can the Minister give us some indication of the action the Secretary of State would require to ensure that there was diversity—essential in employment hearings—in appeal proceedings if this process becomes commonplace?
I come back to my initial point: I do not understand why the balance has been tipped from the current situation, in which when a difficult decision has to be made, judges are absolutely clear that they should bring in people, to a proposal in the Bill that presumes that the judges are likely to want to work on their own initially.
Lord Marland
When I was being taught how to speak—a long time ago and I have obviously not improved much—I was always told, “Paint a picture of somewhere and everyone will listen to your every word”. It is very hard not to hang on to every word of the noble Lord, Lord Monks. One moment he is at the Grand National; the next moment he is at the Nuremberg trials.
These matters are part of our history, and the words that I was most struck by were that we have to move on. This part of the legislation is about moving on. I am afraid that it is a simple fact that these cases are decided on a point of law. The rule of law defines these cases, and you therefore have to have a lawyer to decide the case. As an employer or an employee— I have been both—I would want to know that I was being supported by the rule of law, which is a fundamental part of this country. Therefore, the judge is the only person I would want to hear from in either of those situations, because the case is decided only on a point of law, not on any extenuating circumstances that may come in.
Baroness Brinton
Does the Minister agree that appeals on employment law are set firmly in the context of employment practice? Concepts such as the range of reasonable response depend on a good understanding of how a reasonable employer would in practice handle a dismissal. Therefore there is a value to having lay members assisting the judge in that decision.
Lord Marland
Employment judges know as much about these things as we in this Room do. They have been doing case after case. We are presupposing that judges know nothing and that they are incapable of making decisions based on the rule of law on a subject that is determined by what the law says, not by: “Oh by the way, you must understand that there are extraneous circumstances that may affect the lay person, who quite rightly is sympathetic to them”.
Ultimately, the rule of law prevails. It is the interpretation of the law that prevails, and therefore it is a judge who is qualified to interpret the law, so I do not agree that there is a huge import in having lay members. Of course, as the noble Lord, Lord Monks, who knows so much about this subject, quite rightly says, the judge has the opportunity to choose a panel, and we can get into arm-to-arm combat on whether it is two or four people. Whatever one says, you are damned, in a sense. The judge has the opportunity to have lay members if he thinks there are circumstances he does not understand or working practices with which he is not familiar. Ultimately, these people are being judged on what the law says by someone who can interpret the law, not by people who may or may not understand the law in some circumstances. I am afraid I am not persuaded in this instance—by people who have great knowledge in this subject—that it is in the interests of either party to have lay people, except on cases where the judge himself decides he needs that support.
Baroness Turner of Camden
Does the noble Lord not recall that his Government introduced a law, which we now call LASPO, which denies any kind of legal aid rights to anybody in employment cases? Individuals, unless they are represented by a union or can afford legal representation themselves, have no representation because LASPO forbids it.
Lord Marland
I note what the noble Baroness says, but I do not think that it has any relevance to this amendment. This amendment is about who is going to decide, who is going to interpret the law in this particular case. Therefore, with great respect, I hope the noble Lord, Lord Young, hears what I have to say because it is actually what people will want.
Baroness Donaghy
I want to emphasise that I think that the noble Baroness, Lady Brinton, had it spot on about the reasonableness issue. I know a great number of judges who sit on employment tribunals, and their background is not always in employment relations. They are interchangeable. They go on to the High Court in many cases. I think that they value very much an area of law which is a much more vague part of our legal system in the sense that it is about the workplace and the different power structures of a workplace.
It is important to the judges that they have people with experience of the employment relations world—not employment law, but the employment relations world. That comes back to what I said earlier. I accept that, as the Minister said, this is about whether the case was carried out properly, but it is in a context where the employment situation has to be taken into consideration. We are not talking about equals in a power struggle; we are talking about a very different level of perception. This is about perception: it is important that people see that, up there, there is an employer and an employee sitting in judgment. I think that the applicant and the respondent would be much more likely to respond to a result—as I said, perception is important in the employment world—than they would if a judge, possibly a brand-new judge who had not sat on the case before, were sitting alone. This issue is important, and we would like the Minister to reconsider it.
Lord Marland
I am not denying the issues that the noble Baroness refers to. No one is. We completely understand those issues. As I referenced earlier—the noble Lord, Lord Monks, referenced it, too—the judge can turn to external advice to support them in a case if they need to. There are complicated circumstances but, in relation to this amendment, the reality is that they are being invited to make a judgment based on the law. It is not about the extenuating circumstances; it is not a question of asking, “Should we give them more money?”. It is about the law and the interpretation of the law in coming to a judgment. Other aspects are involved, which is why the ACAS system is so good because it is conciliatory between two parties. In this instance, however, where you are being asked to interpret the law, we believe that the judge is the person to do that. We totally understand all the permutations around employment disputes, but at the end of the day it is the judge who will determine it. An employer or an employee should want their case to be found within the law by someone who can interpret it.
Lord Young of Norwood Green
My Lords, having heard what the Minister said, I admit that I find his response deeply unsatisfactory. He said that that is what an employer or an employee should want because it is only a point of law. Although this debate has touched on other amendments, what we are saying through this amendment is that if things are as clear-cut as the Minister has said, having the consent of both parties for the judge to sit alone should not be a problem. I do not think that it is as clear-cut, for all the reasons given. The noble Baroness, Lady Brinton, pointed out the importance of diversity, which is what lay members bring. A range of other points have been raised. My noble friend Lady Donaghy said that the employment context needs to be taken into account, not just the law. That is what lay members bring to the legal analysis at the Employment Appeal Tribunal. We are in Grand Committee, so we will withdraw the amendment, but we make it absolutely clear that we will return to this on Report, because the Minister’s response does not deal with the genuine concerns that have been expressed on both sides of the Committee.
Baroness Brinton
Might it not be helpful to consider which proceedings ought to have a panel rather than a judge sitting alone? Picking up the point I made earlier about diversity, particularly where there is a claim of discrimination or of inequality of pay, it seems to be an obvious example of where diversity on a panel might provide sage advice as well as reassurance to both parties that diversity is being taken into account.
Lord Marland
My Lords, as far as Amendment 20FA is concerned, FA is probably quite appropriate because I am as slightly confused as noble Lords were. I have therefore invited my officials to have a look at this and to bring something forward before Report that clarifies the position because I am not as clear as I should be. I hope that satisfies the noble Lord, Lord Young. It is a victory for him. It is not our intention to use the Lord Chancellor’s power to prevent judges sitting with members where that judge considers it appropriate. The devil will be in the detail, and I think we should reword the detail. I concede that.
The point made by the noble Baroness, Lady Brinton, on diversity was very important. We take it very seriously. It needs to be considered at all times, not just in this particular field. We take that point on board. With that, I hope the noble Lord, Lord Young, will withdraw his amendment.
Lord Young of Norwood Green
My Lords, this again could be seen as a probing amendment but it would constitute useful, practical advice or guidance for judges. It is a simple amendment which seeks to place a duty on the Secretary of State to prepare guidance for judges regarding situations where it is appropriate for them to sit alone. It would be helpful to define those criteria. Such a definition could take into account the points that have already been made about the need for diversity and the need to have an injection, as it were, of lay experience and wisdom. I think that is fairly straightforward.
I wish to speak also to Amendment 20F which would impose an additional duty on judges to have regard to the Secretary of State’s guidance under the terms of Amendment 20E and, if it is decided that a judge should sit alone, would require that a statement be published explaining the reasons for that decision. That would provide reassurance to those appearing before the tribunal. It would probably also establish some useful precedents in these cases regarding when such a measure is appropriate.
Amendments 20E and 20F are both probing amendments but are reasonably practical examples of how we think that this clause could be suitably amended if we are going to go down this road. I beg to move.
Lord Marland
My Lords, I am afraid that I have a slightly different philosophical view on this matter from that of the noble Lord, Lord Young, although I recognise that this is a probing amendment. I do not think that it is for the Secretary of State or, for that matter, government to intervene in the judiciary. The judiciary should be set aside from government and particularly from some, if not all, Secretaries of State. Whereas I understand the accountability aspect, I do not think this is the right form in which to set it out. Clearly, Parliament sets the framework for these tribunals and how they are managed but I do not think that it is for the Secretary of State or the Government to interfere in this. I am sure that the noble Lord, Lord Young, having been in government himself, and with all his wisdom and experience in these areas, will recognise that that does not strengthen the situation. However, we will doubtless debate this matter further and other ideas will come forward. We are always open to ideas, as we should be, but I hope that with those comments he will withdraw his amendment.
Lord Young of Norwood Green
The noble Lord did not really address Amendment 20F, which talks about imposing an additional duty on judges. Even if he does not like the idea of the Secretary of State providing guidance, part of the amendment refers to publishing a statement explaining the reasons for a decision if it is decided that a judge should sit alone. I would welcome a response on that.
Lord Marland
I apologise; I should have responded on that. I was more interested in the overall scheme of the thing. Our view is that this measure would interfere with the discretion given to judges and that it is up to the judges to decide whether they should sit on a panel or not. I do not think that they necessarily need to justify that because we have empowered the judges to take the action if they so wish.
Lord Young of Norwood Green
My Lords, I want to respond to a couple of points that have been made. I am happy to delete “Beecroft-lite”, if that is causing the noble Lord, Lord Deben, to break out in a rash. The plain fact is that as a result of the introduction of this clause, an employee can be called to a meeting without advance notice of the topic or a formal grievance between the employer and employee, and be presented with a proposal for them to leave their employment for a small payment and after signing a confidential settlement agreement.
I hesitate even more to dispute or cross swords with the noble Lord, Lord Phillips, because in some ways I do not feel qualified to do so. However, it is quite relevant that you should be accompanied by someone if you are going to be called to such a meeting. Perhaps we do not have the wording absolutely right and we will take that into account, but I am merely describing the situation that the amendment was intended to react to, and I apologise if it is not exactly right. However, I agree with my noble friend Lord Monks that this fundamentally changes the nature of employment. As my noble friend Lady Donaghy said, if we really want to give employers some helpful advice on employment relationships, this is not the route that we should going down or the advice we should be giving them. It represents all the negatives.
I am fascinated that termination of employment is the most important thing to focus on as the answer to our current employment problems. When the Chartered Management Institute tells me that only one in five managers receives any training at all these days, I consider that to be a far more important area for us to focus on. I do not make any apologies for the amendment, even though it may not be precisely right. The clause fundamentally changes the nature of the employment situation. In answer to the noble Lord, Lord Brooke, on whether the amendment is unbalanced, we do not think it is. The clause as currently drafted is unbalanced because the employer has the right to call you in without any prior notice and for no apparent reason, and suggest that your employment should be terminated. If only employers could get their contracts of employment, their training and their appraisal procedures right. From my experience of dealing with employers, that is the sort of advice that we should be giving them.
Lord Marland
I note the legal brain of the noble Lord, Lord Phillips of Sudbury, and I am grateful to him for pointing out some of the weaknesses in this amendment. I was also struck by the words of my noble friend Lord Deben. This is a mild change. Listening to the Benches opposite, you would think that we had torn up the law. Scenes from “Oliver!” kept coming back to me while noble Lords were speaking. We are not going to make progress if on the mildest proposal we start bandying words like “Beecroft” and warn of terrible things. All this is doing is mildly redressing the balance that exists, which noble Lords opposite may not agree with because they have taken a position on it. People on this side agree with it. I am grateful to the noble Baroness, Lady Greengross, because she made a very good point at Second Reading that we have to get the balance right so that employers are given the confidence to start employing again. That is all we are trying to do here. We are not seeking to tear up the rulebook, as has been suggested. Indeed, my noble friend Lord Brooke of Sutton Mandeville came right to the point: the claimant has to have legal advice before agreeing a settlement. Nothing will change that and we are not tearing it away; he has to have legal advice. So far as we are concerned, he can get it from any suitable or qualified individual and, obviously, even from trade unions.
It is fundamental that we ensure the safeguards for both the employer and the employee. It is fundamental that an offer is made and that the claimant is properly guided through the process and understands its extent. But as the noble Lord, Lord Brooke, pointed out, the claimant is the only person who is legally able to take advice because the employer is not. On that basis, something of a mountain has been made out of a molehill and I hope the noble Lord will withdraw his amendment.
The noble Baroness, Lady Brinton, again turned to the subject of discrimination. I am told by my officials— I am happy to amplify if my response now is not adequate—that a tribunal would take into account a discussion of the settlement for discrimination element of a claim, but would disregard that information when deciding the unfair dismissal element. I hope that that clarifies the point, but if not, of course I and my officials are at the disposal of the noble Baroness at any time.
Baroness Dean of Thornton-le-Fylde
My Lords, having had some experience of industrial negotiations, I find it unacceptable for the Minister to imply that this is a very mild clause. This is the only part of the Bill where the confidentiality clause appears. Perhaps it requires a clause in its own right, which is something that my colleagues are seeking. New Section 111A(2) refers to,
“any offer made or discussions held”.
Anyone who has been involved in industrial relations knows that in 99 out of 100 cases, an employer will have taken legal advice before speaking to an employee and implying that that employee is not wanted in the company any longer. This assumes that the employer has not taken advice before calling in the employee.
Let us imagination the situation here. With all due respect, we are talking about the workplace, not lawyers’ offices. We are talking about someone at work who is asked to go and see the employer. When they get into the employer’s office, the employer makes them an offer. It might be the first time that the employee has any inkling that the employer wants them out of the company and the psychological impact of that can be substantial. We are talking about someone’s job and livelihood, and getting another job may be quite difficult. This is not a mild amendment. It is trying to keep that balance. It is more than likely that an employer will have taken legal advice and will probably have even got the lawyer to write the letter suggesting that the employee leave the company. If the employee wants to have a representative in that meeting, they should. I think this is a mild amendment; I do not think it is a mild clause as it currently stands.
Lord Brooke of Sutton Mandeville
My Lords, on this occasion, I have considerable sympathy with the amendment moved by the Official Opposition. I do not know whether there are particularly reasons why the words “or constructively” are unacceptable to the Government. No doubt they will emerge, but I can understand that there might be circumstances to which this clause would be relevant where unfairness and constructiveness were mutually exclusive. Something might not qualify as being unfair, but could be interpreted as being constructive dismissal, so I have sympathy for why this amendment has been put down.
Lord Marland
Of course we all have sympathy with this issue, but we are seeking to ensure that the balance is rebalanced so that the employer has some protection and unfair dismissal is not one-sided, as we and the bulk of employers believe it currently is. We are going over quite a lot of ground that has already been covered.
In response to the noble Baroness, Lady Dean, there is a very clear safeguard for employees. There is a very clear procedure that protects them. She made out that a poor person comes into the room and is told for the first time in his or her life that he or she is going to be put out of work, or that there was potential for that, because you cannot do it the first time. It is three strikes, as the Committee knows. The fact of the matter is that often there is justification. The employee is no longer fulfilling their role, and the employer has come to the conclusion that they cannot carry on fulfilling the task that they were employed to carry out. We have to understand that there has to a balance or the employer is not going to carry on employing.
I have been a significant employer and have seen huge—and correct—changes in the balance in favour of the employee and that there has not been indiscriminate behaviour from the employer. I note that the noble Baroness, Lady Donaghy, was more concerned, not about the big companies to which the noble Baroness, Lady Dean, referred—big companies that can prepare the way and will have had all the legal advice before they call that employee in—but the smaller companies that do not have that advice. They are the ones which do not consult and do not handle the whole programme properly. They are the ones we are all concerned about. Indeed, they themselves should be concerned because they have not prepared in the decent and proper way employers should in handling this very important issue in someone’s livelihood.
As such, we must get the balance right. We must understand that we have to be balanced in our rhetoric and that there are two sides to this, as fundamentally we all do, because all of us in this Room want people to employ more people, do it decently and create livelihoods. All we are trying to do here is establish a slightly better balance. With that understanding I hope the noble Lord will withdraw his amendment.
Lord Phillips of Sudbury
Am I not right in thinking that the proposal to add the words “or constructively” is superfluous as an unfair dismissal includes a constructive dismissal?
Lord Young of Norwood Green
My Lords, I really want to respond to the point about restoring the balance. An employer now has two years to decide whether an employee is suitable. That is two years where you have the opportunity to appraise them, train them and find that they are not responding to that. It really harks back to the point made previously by my noble friend Lady Donaghy that the procedures are there and that if an employer acts in a proper manner they can dismiss employees. I would not demur from that. There are employees who do not measure up. What we do not support, and indeed oppose, is the idea that you can carry out this process and somehow the evidence of settlement and negotiations is not there and is not admissible in any dismissal claim. I will withdraw the “constructive and unfair dismissal” claim because I realise that that offends the legal precision.
We are quite clear that the idea that confidentiality should be used in these circumstances is not just a question of rebalancing. It is not, in our view, in any way helping the prospects for future employment. If we really believed that that was the case then maybe we would consider it, but I doubt it because it seems to us that it is both unfair and unjust. This is a perfectly reasonable amendment and it will be another reluctant withdrawal. We will return to it on Report.
Lord Young of Norwood Green
I do not need to detain noble Lords too long in this case. We believe that it would be appropriate and necessary for balance, fairness and justice for the employer to provide an individual with a written statement on reasons for any settlement offer that ought to be admissible as evidence in any unfair dismissal case. To use the phrase about restoring balance again, we believe that, if we were to go down this road, this amendment is necessary to restore balance and provide justice for an employee who is facing the prospect of dismissal and the difficulty of finding future employment. I beg to move.
Lord Marland
I do not want to delay the noble Baroness, Lady Turner, any longer so will just very quickly say that the Government believe that this amendment undermines the purpose of the clause. However, we have been in consultation on this. That consultation closed on 23 November, and we are considering the responses at the moment. We will obviously publish those responses before Report and will have something more to get our teeth into, although we will doubtless disappoint the Opposition with what we come up with. On the basis of what I have said, I hope the noble Lord will withdraw his amendment.
Lord Young of Norwood Green
I do not want anecdotally to try to assess whether the majority of employers are good, bad or indifferent. They occupy a spectrum. Many are good and others are not so good. I say to the noble Lord, Lord Deben, that settlements are currently made outside the tribunal. We do not need to go down this road. I am sorry but the only interpretation we can put on this is that it encourages bad employers. Where does it encourage proper appraisal procedures or proper training procedures? If we really thought that this was about restoring balance, encouraging good practices and good behaviour and encouraging extra employment opportunities, as my noble friend Lord Stevenson of Balmacara said, then of course we would support it. However, in our view it does none of those things, which is why we strenuously oppose it.
Lord Marland
The noble Lord, Lord Young, has just explained why the Benches opposite have got this wrong. All they have talked about is the employee. At no point have they said, “What about the employer? Does this measure in any way improve things for the employer?”. The employer is the person who will employ people, provide jobs and create new jobs. My noble friend Lord Deben made the case beautifully; I need say little because he put it so well. This is exaggerated rhetoric and nonsense. The measure is a mild change but all we are getting is exaggerated rhetoric as if we are all going back to the workplace run by bad employers with bullying and all this sort of thing.
We know that bad employers go out of business—they go out of business fast because people do not want to work for them. They are not good employers, so they go bust. Good employers, who are the larger proportion of people, exist. Very strong rules and regulations have been improved over time—rightly so—and this Government are not saying under any circumstances that they should not be improved, or that they should not have been improved in the past.
We are trying to speed up the process and give people legitimate rights and clear interpretation of the law; then both parties will benefit. Employers will employ more employees, bad employers will go out of business, and bad employees will no longer be employed. At no point has anyone said “What about the bad employees? How do we get rid of the bad employees, who are a burden on good businesses and stop them surviving?”.
Lord Marland
I am not giving way, because we have had enough on this. We have heard everything that the noble Lord has had to say on it. This is a matter of debate, and we will doubtless say more.
Ultimately, we are all coming from the same place. We want good employers and good employees. We want them both to be properly represented and to have the opportunity. As my noble friend Lord Deben says, this simply puts a mild balance back. What employers would like to see happen is just as important as what employees want.
Lord Young of Norwood Green
I wish to put the record straight on one point. I specifically mentioned that there was a proper way to deal with—to use the Minister’s phrase—“bad employees”, or employees who fail to live up to the mark. If the appraisal system is done properly, then there is a route to dismissal.
Lord Monks
I support my noble friend in this amendment. He gave the statistics for the current situation and pointed out that the median award is just £4,500. Set against the mean annual salary or average salary, that is very low indeed. This is just a mechanism for transferring the costs of dismissal away from the employer and reducing the employer’s potential liability. I disagree with it and again it is the wrong signal to send. It is not a huge signal—I do not want to be accused by the Minister of gross exaggeration, as might have been the case once or twice earlier in our debates—but it is clearly the duty of the Committee to indicate that this is a transfer, a potential loss for the employee and a potential gain for the employer.
While I am on my feet, if at some point in the subsequent proceedings the Minister can explain the difference between the no-fault dismissal provisions of Mr Beecroft and the provisions in Clause 12, I shall be very interested to hear it. In practical terms, they are very similar.
Lord Marland
I am not going to get into that for the moment, but I am sure we will pick it up later. The Government take the matter of this cap seriously and that is why we are consulting on it. The consultation closed on 23 November and we will publish the response before we reach the Report stage, so we will be able to have a good debate on it. I thought that the noble Lords, Lord Young and Lord Monks, made some very poignant remarks, and we share their concerns. We also acknowledge the keen detail of the facts that have been presented. There are very few cases which get to the limit, but they are important. The average award is £5,000, of course, and the cap is £72,300. We recognise that, we understand it; we know that we have got to get it right. We are obviously sympathetic to a number of the cases that the noble Lord, Lord Young, has mentioned and, with that, I hope that we can revisit this in the spirit of co-operation because I think it is important, and that we can be conjugated—conjugare, which means to bind together in the same outcome—in time to come.
Lord Young of Norwood Green
I would not say that it is peace in our time but it is not a bad offer. I genuinely thank the Minister for his response. In the circumstances, I beg leave to withdraw the amendment and I look forward to the further consideration as a result of the consultation.
Lord Monks
That is not a constructive suggestion. Many of those million jobs were in the private sector. Unfortunately, far too many of them were in the south-east of England and not in the poorer regions. I accept that the noble Lord has a point in that the public sector was the major driver of the economy and of the regeneration of our cities in the north of England and in Scotland and south Wales. A large number of jobs were created. There have been some exaggerated claims about the possible effects of the national minimum wage and so on but that is probably another debate for another day and well beyond the scope of this clause. However, in the OECD league tables, the British labour market is ranked number three for flexibility. This country is the third easiest when it comes to employers being able to sack people. I wish that employers would stop moaning about this, look at some of the evidence from abroad and get on with seeking to help to increase employment by looking at what they can do themselves and at the changes that the Government can make, possibly in relation to national insurance and so on. That would boost employment opportunities far more than giving a licence to some employers—I think that they are a minority but they are not very good employers—who would take advantage of these kinds of provisions.
Lord Marland
My Lords, if we are to make any progress on this Bill, we have to take a more conciliatory position between ourselves. I believe that underlying all this is a conciliatory position, because ultimately we all want more jobs and more people employing others. We all feel passionately about that. We cannot always come at this from the polarised position of the TUC. Indeed, we as government are not coming at this by saying, “Beecroft says this, so we must do it”. In fact, as a department, we rejected quite a few things that Beecroft said because we did not think that they were in the interests of employees. Therefore, we are not taking a polarised position based upon part of the argument. In the end, we are all interdependent. Without the employer, we do not have employees, and without employees, we do not have a return to prosperity.
It was a pleasure to negotiate with unions in the north. Sellafield was my area of responsibility. I much admired the way in which they came to the table and to understand that they had to improve their working terms and conditions for Britain to become competitive again. It is to their eternal credit that after two rounds, three pinfalls and one submission, we got to a very amicable and successful direct contact where there was mutual respect. As an employer, the first company with which I was involved in setting up, the majority of people who worked there were shareholders. We believed that that community spirit was the best way forward.
I have already conceded on this matter and we do not really need to debate it, but we have a roaming brief on this issue. I think that all parties agree that we need to have a cap on awards but we need to make sure that we get it right and that it is fair. It should not be in favour of the employee or the employee: it should be fair and balanced. This House is good at being fair and balanced.
I am grateful for the contributions, which have been fair and balanced at times. When they have been fair and balanced, we have started to make progress. I think that in our hearts we all want the same thing. At the end of all this, we will have the same thing. It will leave this place a better Bill. It will have been challenged. It will not have been challenged by taking unreasonable, polarised positions. If we did, we would not end up with something reasonable at the end.
After all this, I hope that the noble Baroness will support this clause.
Baroness Turner of Camden
I thank the Minister for his fairly sympathetic response. I also thank noble Lords who have contributed to the debate, particularly my noble friend Lord Monks who set out what has happened over the years in relation to employment rights, which have been the fruit of the struggle of many of us over the years. Workers in their unions, and workers not always in unions, have struggled very hard to maintain rights in employment, which did not come easily to them.
Eventually, we succeeded in getting quite a lot of employment rights. My former noble friend, Lord Wedderburn of Charlton, who I am sorry is no longer with us, was very instrumental in changing the law in this country. He did it as a result of pressure from unions on behalf of the workers who, at that time and in the past 200 years, have been through most appalling conditions. Through organisation and struggle, they managed to change that and we now have a set of employment rights which many of us are now fighting to maintain.
A good employer does not dispute that workers have entitlement to rights. Usually, they are quite willing to honour those rights. It is the poor employer who does not and who wishes that they can regard their employees as disposable. We do not regard employees as disposable. We want to ensure that employment rights are suitably maintained. We shall continue with this when the legislation now before us reaches Report stage. We take on board what the Government have said but I think that we shall come back with different wording and we shall argue for it. That will not be for this evening but perhaps for another time.